When Bernie Sanders proposed $18 trillion in increased federal spending over the next ten years, most observers chuckled and asked what else one could expect from the self-described socialist. But what then is one to make of Hillary Clinton? She hasn’t — yet — risen to Sanders-level spending, but she’s certainly heading in that direction.
This week, for example, she unveiled a “jobs” plan that includes the usual motley collection of infrastructure projects, “green energy,” subsidies, manufacturing incentives, government research and development, and so on. In total these proposals would cost at least $350 billion over a decade.
Then there is Clinton’s plan for reduced college tuition. While not as grandiose as Sanders’s “free tuition for everyone,” Clinton’s proposal would still cost at least $350 billion.
Clinton has already called for more than $1.1 trillion in new spending over the next ten years.
Altogether, Clinton has already called for more than $1.1 trillion in new spending over the next ten years. And it’s still eleven months until the election.
And, while it’s not precisely “new” spending, Hillary has been steadfast in opposition to reforming Social Security, Medicare, and Medicaid. She has even expressed sympathy, if not yet support, for proposals to expand Social Security.
Indeed, the Washington Post scoffs that “There is simply no way that the federal government can meet its current fiscal commitments, plus the increased demands of an aging population, and provide the new forms of middle-class relief and business tax relief Ms. Clinton promises, while tapping only the top 3 percent of earners.” (Emphasis in original.)
That’s because, as University of Chicago professor Austan Goolsbee, a former Obama adviser, acknowledges,
[E]very advanced country that has this kind of expansive role of government in the economy pays for it with substantially higher tax burdens on middle income people. Every one of the big welfare states in Europe, for example, has a VAT/sales tax in the 20–25 percent range and has high income tax rates that apply to large segments of the population, not just the top. Ordinary workers in those countries bear a larger share of the government bill than we do in the U.S., not a smaller share. Could you turn the U.S. into a Sweden-style social democracy without having the broadly based, high taxes they have in Sweden? Not really, no.
Simply put, when you hear “the rich will pay for it,” hold onto your own wallet.Republican candidates have frequently — and often correctly — been castigated for tax and budget proposals that don’t quite add up. Republicans sometimes invest too much confidence in the notion that the growth fairy will pay for whatever tax cuts they propose, relieving them of responsibility for actually proposing cuts in government spending. And, while it is true that many tax cuts, especially supply-side reductions, can spur economic growth, it is untrue that all tax cuts pay for themselves.
But for Democrats to pretend that we can continue to tax and spend without hurting the economy or socking it to the middle class goes beyond bad math and enters the realm of pure fantasy. And for middle-class taxpayers, that fantasy is likely to be more of a nightmare.
— Michael Tanner is a senior fellow at the Cato Institute and the author of Going for Broke: Deficits, Debt, and the Entitlement Crisis. You can follow him on Twitter @mtannercato, or on his blog, TannerOnPolicy.com.